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Current Attempt in Progress As at December 3 1 , 2 0 2 3 , Crane Corporation is having its financial statements audited for the
Current Attempt in Progress As at December Crane Corporation is having its financial statements audited for the first time ever. The auditor has found the following items that might have an effect on previous years. Crane purchased equipment on January for $ At that time, the equipment had an estimated useful life of years, with a $ residual value. The equipment is depreciated on a straightline besis. On January as a result of additional information, the company determined that the equipment had a total useful life of seven years with a $ residual value. During Crane changed from the doubledecliningbalance method for its building to the straightline method because the company thinks the straightline method now more closely follows the benefits received from using the assets. The currentyear depreciation was calculated using the new method following straightline depreciation. In case the following information was needed, the auditor provided calculations that present depreciation on both bases. The building had originally cost $ million when purchased at the beginning of and has a residual value of $ It is depreciated over years. The original estimates of useful life and residual value are still accurate. Crane purchased a machine on July at a cost of $ The machine has a residual value of $ and a useful life of eight years. Crane's bookeeper recorded straightline depreciation during each year but failed to consider the residual value. Prior to development costs were expensed immediately because they were immaterial. Due to an increase in development phase projects, development costs have now become material and management has decided to capitalize and depreciate them over three years. The development costs meet all six specific conditions for capitalization of development phase costs. Amounts expensed in and were $$ and $ respectively. During $ was spent and the amount was debited to Deferred Development Costs an asset accounta Prepare the necessary journal entries to record each of the changes or errors. The books for have been adjusted but not dosed. Ignore income tax effects. List all debit entries before credit entries. Round answers to decimal places, eg Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter for the amounts.a
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Prepare the necessary journal entries to record each of the changes or errors. The books for have been adjusted but not dosed. Ignore income tax effects. List all debit entries before credit entries. Round answers to decimal places, eg Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter for the amounts.
No Account Titles and Explanation
Debit
Depreclation Expense
Accumulated Depreclation Equlpment
Depreclation Expense
Accumulated Depreclation Machinery
Deferred Development Costs
Retalned Earnings
Depreclation Expense
Accumulated Depreclatlon Leasehold improvements
Credit
Depreclation Expense
Accumulated Depreclation Machinery
Retained Earnings
Depreclation Expense
Accumulated Depreclation Leasehold improvements
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